Tit Chung Tong lies to Bak Sing Mo that the treasure is hidden at Hsuchow, drawing Mo to take him there so that he can make his escape on the way. Arriving at Hsuchow, the two come across the Queen Bee whose fighters defeat Mo, taking Tong away.
People from all sects gather at the Tigers and Dragons Meeting. Shui Ling Kwong brings Little Ghosts along, taking the Blood Flag with her. She opens bids for the flag but fails to make a transaction. Kwong thus leaves with the flag and no one dares to stop her since they cannot beat the Little Ghosts.
Szeto Siu and the Queen Bee fight to get Tong. Liu Ho Yee and Chu Wan Pang pass by and in rescuing Tong, Yee is wounded by Madam Sing. After curing Yee, Tong leaves quietly, making a good impression on Yee.
After much effort, Yee manages to convince Master Thunder Whip to recover Pang's memory. Pang reverts to his bad character, much to disappoint Yee who then leaves in sorrow.